Bahrain’s Elaf cracks Malaysian market

Elaf Bank, a Bahrain-based Islamic bank, has announced that it is working on three Sukuk deals originating from Malaysia.

Jamil Jaroudi, the bank’s CEO, told reporters at a conference in Abu Dhabi that the total Sukuk it was arranging was worth some $1.5bn, with the smallest issue $100m and the largest $1.2bn.

Jaroudi did not reveal the issuer’s names and did not respond to The Islamic Globe’s request for comment by the time the newspaper went to press.

Elaf will be the sole arranger of the three Sukuk in Malaysia, but other banks may join the deal at a later stage.

The news comes on the back of reports of spreads widening between GCC and Malaysian-based Islamic notes, with Dubai most affected.

According to Bloomberg data the yield on Dubai’s 6.396% notes due in November 2014 jumped 76bps last week to 6.40% on October 7, widening the premium over Malaysia’s 3.928% bonds due June 2015 to 337bps.

The spread increased to 353bps on October 4, the widest since March 16, as investors perceive the risk of Dubai failing to make repayments on its Sukuk twice that of Malaysia, according to credit default swaps returns.